Latest / Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates
How Central Banks Use Reserve Requirements as a Policy Tool
In Episode 70 of Monetary Policy Explained with Fexingo, Lucas and Luna unpack the forgotten workhorse of central banking: reserve requirements. Once the go-to tool for controlling bank lending, reserve ratios have been sidelined in the US, UK, and Eurozone since the shift to an ample-reserves framework. But they're not dead. The hosts walk through the mechanics, the history of how reserve requirements worked from the 1930s through the 2008 crisis, and the case study of China's 2021-2022 reserve requirement ratio cuts to stimulate lending. They also discuss why the Fed, ECB, and…
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